Month: May 2016

The following is a talk I gave to a retail sales team on the subject of customer service:

Today I want to share a “Tale of Two Kart Tracks” with you. The two kart tracks are “Simraceway” in Sonoma, CA at the Sonoma Raceway, and “CalSpeed Karting” in Fontana, CA, at the Fontana Auto Club Speedway. I visited Simraceway with some friends a couple weekends ago, and I visited CalSpeed last year with a group of employees across our organization.

First, let’s talk about what it was like to arrive at each facility. At Simraceway, we entered the main gate for the Sonoma Raceway and informed the gate attendant that we were here to do some gokarting. He looked at us with a puzzled expression and admitted he wasn’t sure if there was any karting going on. After going back and forth, he suggested that, if there was a place to do gokarting, it might be inside and up at the top of the hill inside the track, but he emphasized he really didn’t know what we’d find up there.

At the Fontana Speedway, the gate attendant knew exactly where the kart track was, offered us a map and explained where we were on the map and which way to go down the road to get to the kart track without getting lost.

Next, let’s talk about checking in and paying. At Simraceway, we pulled up and parked in a general parking lot and wandered around for a bit trying to figure out, due to poor signage, where we needed to go to get karting. An employee finally noticed us and asked if she could help and then pointed at a shed some ways off from where we were standing as the place to go to buy our race admission. She didn’t seem particularly busy, but she was apparently too busy to escort us. I had seen on the internet that the track was offering a buy 3, get two races free package. When I asked the employee about this, she informed me that she didn’t know about that deal because it “Wasn’t her department.” Please keep in mind that over the course of the day we saw THREE employees total at the track, so this didn’t appear to be a mega corporation. When we made it to the cashier’s booth, the employee on duty seemed frustrated to have to explain the pricing options to us. When we attempted to upsell ourselves on an icy cold beverage in the refrigerator, he seemed confused as to how to process the transaction. He didn’t seem very excited for us to be there doing business with him. Keep this young man in mind because I will say more about him in a bit.

At the Fontana Speedway, we arrived in a clearly demarked holding pen. Uniformed employees came out, greeted us and set our expectations about filling out required paperwork and waiting for the track marshals to be ready to get us for orientation. Everyone smiled and offered their help as we waited. There were about four or five employees just handling checkins for our large group.

When everything was ready and the attendees were assigned to heats w/ separate colored arm bands, we were invited in, one team at a time, to the training room to receive a welcome from the track marshals, who described the kind of karts we’d be driving, the organization of our practice, qualifying and racing sessions, safety standards of the track, flags and signalling on the track and a basic walkthrough of the best line to take on the track. Then, everyone suited up with jumpsuits, headsocks, helmets and neck braces which were in good condition and of a similar brand and style to avoid confusion.

Can you guess how this was handled at Simraceway? There was no orientation. There was no explanation of the karts, of signalling on the track nor of safety. We were shown to a small, dingy closet and left to figure out the equipment on our own. When my friend emerged with a helmet that was clearly too big for his head and shook his head back and forth to show how the helmet swiveled, the track attendant told him it “should be fine.” When I asked what the best line was on the track, the track attendant told me, “I don’t know, I am sure you’ll figure it out.”

We were led outside to our karts and the young man who first took our money. He looked sullen and pointed at the karts we should ride in which were lined up side by side in the pit. I noticed there were just enough karts for our group of 5– what if other customers arrive? I asked, looking at another set of 7 karts pulled off on the gravel. “You’ll probably be the only ones” we were told. We climbed into our karts (without any explanation of the safe way to do so, for kart and driver alike) and then, as we waited for our engines to get started, I chatted with the young man. Did he live around here? Does he like it out here? Etc. He complained, “I have to work 3 jobs right now, one of them is bartending in town. I am really tired.” I took mental note of that.

At CalSpeed, the attitude was fun, but serious. The track marshals demonstrated how to safely climb in and out of the karts. Where not to put hands and feet, at rest or in motion. What to do if they stalled out on the track. We had a group of about 45, and there were enough karts for everyone (3 heats of 15). The track marshals led the teams in the first couple laps out on the track in their own karts to demonstrate a good racing line and how to drive the track. Then we were “off to the races!”

At Simraceway, I asked if the track attendants could help us line up and do an organized start so we could race for position. Despite being their only customers, this seemed like an inconvenient request and after some badgering, the young man finally accepted that if we lined ourselves up as we came down the final straight away, he’d wave a flag to signal the race was on. It wasn’t exactly what you’d call organized, and it didn’t seem like he cared much if we had the experience we wanted. In our 5 races, he didn’t manage to start us the way I had asked even once– and in the first lap of the first race, two of our racers stalled out trying to line up for the final straightaway start.

Needless to say, our small party went off the track and into the dirt, weeds and brambles quite a bit over those 5 races. In each race we had at least one complete stall out where a driver’s kart died on the track and he had to pull off to the side and wait for someone to come out and jump it. On one occassion, that driver was me and my friends completed four or five laps before an attendant got to me, then another 3 while the attendant tried and failed to pull the jump cord (no offense to our female friends, but she just didn’t appear strong enough and somehow was surprised by this fact despite not being able to jump start anyone’s karts in the pits, either). I essentially sat on the outside of the track for half a race! When one of my friends complained about this happening to him and asked for a partial refund, the track attendant first argued and told him “Well, you only missed 5 minutes”… of a 12 minute race! And when he asked to speak to a manager, she got on her walkietalkie right in front of him and made it sound like he was asking for the world and the manager denied the request. Then, when he asked to see the manager in person, she got back on the walkie talkie and the manager could be heard saying, “Alright, just give him $10” It was ridiculous and arbitrary! During each of the 5 races, one driver had to rotate through the kart that we all agreed was slower by half than the other karts– despite my consistently turning over faster lap times in the first four races, I could not make this kart go any faster, which my friends gleefully told me was a sign of my hubris for thinking I could beat them in the “slow kart.”

How was this handled at CalSpeed? Needless to say, there were very few problems to address, because the staff was prepared and they had prepared us in return. Most problems that could’ve occurred, were avoided. And when someone’s kart did become inoperable occassionally, they were promptly moved off the track, returned to the pits and put in a new kart and sent back out into the melee. Simraceway couldn’t even do this because more than half of their karts were in disrepair!! Overall, CalSpeed was extremely accomodating of our needs and wants. We were their “only customers for the day” and they treated us like we were special and created structure and order to our race activities that really enhanced the fun. No one seemed surprised at anything.

The last thing I noticed was about how we left. I noticed a race podium near the cashier shack, but no one on duty ever offered to take our pictures there afterward to commemorate the days events at Simraceway. Instead, our final memory of the place is one of absurdity– after never receiving a safety briefing the entire time we were there, one of my friends was scolded in the pits about some hand movement he had made out on the track because, as the employee said, “Safety is our number one priority here and that just isn’t safe.” She said this as we were climbing out of our karts after the FINAL RACE OF THE DAY. Talk about bad timing!

At CalSpeed, the day was not complete before the top three finishers of each heat were stood up on the podium and cheered by the entire group. Pictures were taken and everyone chattered excitedly about all the fun they had and all the interesting things they learned about racing that day.

What lessons can be learned in comparing these two facilities?

First, let’s consider the value of preparedness. With appropriate levels of trained staff, a fleet of well-maintained karts and an organizational structure for the day, the CalSpeed group demonstrated that they were professionals who expected our business and were prepared to deliver us an excellent experience. At Simraceway, the poorly trained staff, with rundown and inoperable karts and no real racing structure or organization for their services (we were told at various points that our race sessions would be 10, 12 and 15 minutes long… they ended up being about 13 minutes) demonstrated that they were surprised to have customers and not really in a position to serve more than the 5 of us who happened to show up.

Second, let’s consider the value of consistency. From arrival and check in to departure, the smiles, attitudes and helpfulness of the CalSpeed group were consistent. It gave us the sense we working with one team, who loved their jobs and were dedicated to our enjoyment at their facility. It was, of course, just the opposite at Simraceway, where the gate attendant didn’t even know there was karting on site, the track attendants didn’t know their roles only what they weren’t responsible for (apparently, customer service…) and the fun and excitement of karting was always tempered by the disillusionment and cluelessness of the staff serving us.

Third, let’s talk about opportunity. If the people at CalSpeed are working other jobs, I didn’t hear about it. Their sole focus was on the job they had to do right then, in that moment, with us, their customers. They probably don’t have to work other jobs because CalSpeed is a successful operation that keeps them all busy. It is hard to feel sorry for the young man at Simraceway working three jobs to get by. He is standing on top of what Earl Nightengale would call a “Field of Diamonds”, he just doesn’t seem to recognize the opportunity.

In parting, I’d like to ask you to think about the following:

Of these two kart tracks, which do you think is more profitable?
Of these two kart tracks, which do you think has an easier time with marketing and generating new and referral business?
Of these two kart tracks, which do you think has higher customer satisfaction and loyalty?
Of these two kart tracks, which would you rather visit as a paying customer?
Of these two kart tracks, which would you rather work at as an employee?
Of these two kart tracks, which would you be most proud to own?

Final thought: both of these kart tracks are on the grounds of a larger race operation; both have access to the same go kart technology and safety systems; both of these kart tracks have the opportunity to charge the same amount to their customers; both of these kart tracks are in California and both of these kart tracks are selling the same service at the end of the day– the experience of racing with friends.

So what is it that makes these two kart tracks different?

In my mind, the “Tale of Two Kart Tracks” is really “The Tale of Two Attitudes Toward Customer Service.”

These are notes I used for a talk I gave on Sam Walton’s business principles as evidenced in his book Made in America:

“COMMIT to your business. Believe in it more than anybody else.” If you love your work, other people will sense that, including co-workers and customers, and catch the passion from you, like a fever.

PARTNERSHIP. Take MENTAL OWNERSHIP of your business, and treat the people around you at work as valued partners in your enterprise. Seek input from others, work together to achieve common goals and make decisions that you’d be happy with over the long-term, which will help you accrue the benefits over time.

MOTIVATE your partners. Find different ways to keep score and new ways to challenge each other to new personal best records. Encourage your partners to ever greater heights and they will do the same for you.

COMMUNICATE openly. Share information with your partners about your business and ask for information about theirs. The more everyone knows, the more able they are to act to the benefit of the entire company.

APPRECIATE everything your partners do. Sharing praise and congratulations costs us nothing, but it is worth a lot to the people who receive it and will make you feel better for having shared it, too.

CELEBRATE successes and don’t take yourself too seriously. Find what is funny about your failures. Have fun. At the end of the day, it’s only work and you’re only human. Such enthusiasm and energy is engaging to all.

LISTEN to everyone in your company. Everyone has a different and potentially valuable perspective, from managers to cashiers, sales people to valets. Everyone sees a different part of the business and a different side of the customer experience. By getting the people you work with talking you might learn valuable information about how you could improve your customer service and meet the needs of more customers to hit more of your goals and make more money in the process.

EXCEED your customer’s expectations, this is what will bring them back again and again. Have a personal standard, explain it to your customers and apologize and make it right if you ever fail to live up to it. Think about how you’d handle situations that arise if your personal motto was “Satisfaction Guaranteed.” You don’t have to do anything wild, you just have to do a little bit more than your customers were expecting.

CONTROL your processes to avoid costly mistakes. Even if you do not carry a personal Profit and Loss statement with cash expenses, you can still reduce your profitability by making choices that are inconsistent with your goals and less efficient than following a consistent, well thought out process. Create a discipline that accrues every small advantage in your favor and avoids needless leaks that cost you deals and gross. These little errors can add up to thousands of dollars and hundreds of potential customer relationships missed over time!

SWIM UPSTREAM. Sometimes you’ve got to go the other way to find your niche. Be ready to see people waving you down, telling you you’re going the wrong way. But realize finding what makes you unique and sticking to it is what gives you your edge, and gets others to follow you, whether they’re customers, co-workers or your family and friends.

Quote: “My life has been a tradeoff. If I wanted to reach the goals I set for myself, I had to get at it and stay at it every day. I had to think about it all the time. I had to get up every day with my mind set on improving something. I was driven by a desire to always be on the top of the heap. But in the larger sense, did I make the right choices? I can honestly say that if I had the choices to make all over again, I would make just about the same ones.”

Ayrton Senna was a Brazilian F1 driver, three time world champion and former go-kart racer who died in a crash during a race at the San Marino GP (May 1st, 1994). Tragically, he was the second driver to die at the track that weekend, the first being Roland Ratzenberger during qualifying earlier in the weekend.

Senna was a devoutly religious individual who attributed much of his success to the influence and providence of god. This may have been an irrational flaw of his, but it seemed balanced by his rational characteristics– humility, honesty, discipline, perseverance and determination to continually improve himself both as a driver and as an individual.

Senna was fiercely competitive and hated the politics of the F1 world, which put many drivers like him at risk all in the name of making the sport more entertaining and sensational. His original relationship with teammate and former world champion French driver Alain Proust quickly turned from a seasoned pro mentoring the young upstart rookie into a battle for survival and supremacy that ultimately resulted in a nasty and dishonest move by Proust in an attempt to deny Senna a chance at the championship title. Secure in his points leadership so long as Senna did not finish the race, Proust forced a collision that disabled his car and nearly eliminated Senna from the race several laps before the finish, pushing both cars off a chicane and into a safety tire barricade.

Undeterred, Senna restarted his vehicle from a standstill, navigated around the tire barrier and back onto the track and ultimately won the race. Still, he was denied the championship by inside F1 politics revolving around technical interpretations of the governing regulations whose interpretation had no prior precedent.

Senna got his revenge the following season when the roles were reversed. Secure in the points lead himself so long as Proust did not finish, and having won pole position in qualifying but having been relegated to the outside of the track at the start of the race because of insider politics, Senna took matter into his own hands by forcing a collision between he and team mate Alain Proust moments after the start. Proust was finished and Senna claimed his title at the end of the day, though he would’ve preferred to win in an honest fashion.

A proud Brazilian, Senna finally won the Brazilian GP in 1993 despite a failed gearbox which locked his car into 6th gear for the final few laps of the race. Luckily, his lead was so great that even with the inability to utilize any other gears, Senna was able to achieve victory. He was so excited upon finishing that he first passed out, then suffered debilitating shoulder weakness that caused him to be almost unable to raise the trophy above his head in the winner’s circle. The lesson to be learned? Never take the lead for granted, push for every marginal advantage you can find because you never know when you’ll be incapacitated and have to rely on coasting to the finish for victory.

Senna was not perfect. He attributed part of his success to a faith in a make believe entity in the sky. He was not above playing dirty if that was what it took to get revenge against those who had done the same to him.

But he was still a hero. He followed his passion in life– to be a championship racer. He refused to give up. He spoke his mind about the realities of F1 politics and the dangers of his profession and was not afraid to defend his understanding of justice. He was committed to personal excellence because he realized that even if his career would be short, his life might be long, and self-improvement was a journey he could carry on with for his entire life no matter his circumstances.

Economics is a young science offering knowledge which did not fit into the existing disciplines of logic, mathematics, psychology or history. Its methodology is different, examining acting individuals and not historical events or social aggregates. It demonstrates social regularities or “laws” which can not be legislated out of existence or ignored, like gravity. The conclusions of economic science threaten many partisans and have led to the first debates about the validity and universality of logic itself in response. Despite the claims of critics, economic theory has achieved a lot of practical success, such as the liberalization that allowed for the “Industrial Revolution” to transform Western civilization. Knowledge of economic theory is directly intertwined with the flourishing of mankind anywhere.

Part One, HUMAN ACTION, I. Acting Man

Psychology examines WHY a man acts, praxeology studies, deductively, what we can know from the fact THAT a man acts. It views action as effective, or ineffective, never rational/irrational or “good”/“bad”. Human action requires knowledge of causal relationships and a belief in man’s ability to influence them. All human action seeks the removal of felt uneasiness.

II. Epistemological Problems of the Science of Human Action

Economics and history are the two main branches of praxeology. History is an arrangement and interpretation of data concerning human action in the past; it is not predictive but descriptive. Human action is a complex, multi-causal phenomenon and thus can not be studied according to the “empirical” methodologies of the natural sciences requiring a single variable amongst innumerate constants.

Economics demands methodological apriorism, or the acknowledgement that it is impossible for man to conceive of a reality in which the fundamental logical understanding of causality does not hold. All of his experience must be filtered through pre-existing logical (theoretical) categories, i.e., understanding money requires knowledge of the concept of money to make sense of data concerning money.

Methodological individualism asserts action can only be studied through the behavior of individuals. This is not violated by the fact that man puts meaning in collective entities and aims his actions in certain ways operating under these beliefs. Praxeology is also methodologically singular and causal-realist— it examines specific actions carried out by specific individuals at specific places and points in time. “A cathedral is something other than a heap of stones joined together. But the only procedure for constructing a cathedral is to lay one stone upon another.”

Historians can only achieve “verstehen”, or understanding, by selecting certain data as valuable and excluding other data as irrelevant to their inquiry. They must utilize the best theories of other intellectual disciplines (economics, physics, biology, etc.) to interpret the data and its significance. History is “open to interpretation” only when the underlying theories relied upon are still controversial and debated. There are no constants in the history of human action.

“The end of science is to know reality”, economic theory is developed to better understand practical economic problems men face, and this fact guides man’s inquiry into the discipline although it does not change its aprioristic character. Economics studies real acting man as he exists, not an ideal type, e.g., homo economicus.

III. Economics and the Revolt Against Reason

Socialist philosophers could not defeat the logical theories of early economists so they turned to the undermining of reason itself as a method of defending their ideas. Without any biological evidence, Marxian polylogism asserts that every class has a unique logic derived from its class consciousness. “Ideology” is any idea which deviates from pure proletarian logic but is nonetheless useful to the class espousing it. Polylogism scan not explain why people of the same social class nonetheless arrive at different conclusions about the truth.

IV. A First Analysis of the Category of Action

Man refers to an internal, ordinal scale of values when acting. Action can be thought of as an exchange of one set of conditions for another, more satisfactory, set of conditions. Economics examines the meaning men give to things, as translated through their actions, not what various 3rd parties observing might think about such action in accordance with external value systems. Value is within men and therefore subjective, not within things, intrinsically, and therefore objective. Economics examines what man DOES (and DOES NOT, but could have…) do, not what he ought to do. Cost is best thought of as the value of the next best thing given up.

V. Time

Action is always aimed at the future. “The present” is a praxeological category and a conceptual ideal used to examine discrete, continuous actions. In physical reality, only the past and the future exist. The future is uncertain, implying we aren’t even sure in the moment how much of our action belongs to the present versus other time periods. Time must be economized like any other scarce resource. Actions can not happen synchronously, always either sooner or later. Man’s values can and do change over time, and with it, his actions.

VI. Uncertainty

Metaphysically, the world may in fact be deterministic; but man’s experience is one of choice. In matters of uncertainty, man faces class uncertainty (the qualities of the members of the class are known, but the character of a specific event which might take place within that class are unknown; e.g., dice roll) and case probability (some causal factors guiding the outcome are known but others are not and the case itself is unique compared to other events; e.g., presidential election). Human action falls under the rubric of case probability. Case probability can not be statistically quantified because it would involve summing items with no common denominator. Game theory is also an inappropriate means for studying human action within the market economy because it adopts the metaphor of combat when the competitive division of labor is cooperative and positive-sum. All praxeological prediction is based on “understanding”, not quantification.

VII. Action Within The World

Utility is how we describe those things which help remove felt uneasiness. Subjective utility is different than objective, or technological, utility. Man does not choose between total supplies of goods but only those discrete amounts of the supply useful to his specific end. He satisfies his most urgent wants before his less urgent wants and therefore values the means “at the margin” of what less urgent want he has to give up (Law of Diminishing Marginal Returns). Supply is a set of homogenous goods which could equally satisfy a given end. Technological recipes are not part of supply because they are inexhaustible once discovered. The Law of Returns identifies the fact that there is always a most efficient, or optimum, way to utilize scarce means to achieve a desired end; but this optimum can only be discovered through experience because of the uncertain nature of human action. “Men do not economize labor in general, but the particular kinds of labor available.” The supply of labor available is conditioned upon genetics, social conditioning and innate human subjective preferences for labor vs. leisure. The potential supply of labor for each kind of work necessarily exceeds the demand in the long run because labor can be shifted and retrained to perform new tasks. Labor is always more scarce than the material factors of production (land, capital). The substitution of “labor saving” machinery for human labor does not render labor abundant so long as there are still more material productive factors available to combine with the freed up labor to pursue additional human well-being. Activities which provide immediate gratification are not labor nor work but consumption goods themselves, of the first order. Production is not a creative act but one of rearrangement of already existent phenomena. Man is creative only in thinking, not rearranging the world according to his thoughts. The material changes of man’s economy are due solely to the ideas he holds in his head about what is desirable. “Production is alteration of the given according to the designs of reason.”

Full notes:

Introduction

The introduction of the book is Mises’s explanation for why he wrote the book— to ground economics in the science of praxeology and to refute the various anti-economic philosophies. It seeks to answer the simple question, “Why did Mises write this book?”

1. Economics and Praxeology

Economics is a young science. It introduced new knowledge about human society that did not fit into the existing disciplines of logic, mathematics, psychology, history or biology. It stood in opposition to earlier methodologies for explaining social phenomena, such as historicism, which focused on social aggregates and metaphysical supernaturalism. Other social philosophers focused on practically changing society through forms of social engineering, believing any kind of regularity to social relationships was non-existent and thus not worth considering in their schemes. The discovery of social regularities contained within economic study proved an intellectual revolution. But the revolution was limited in scope until a general theory of human choice (praxeology) could be developed.

2. The Epistemological Problem of a General Theory of Human Action

Economic study suffered a serious early crisis during the “Methodenstreit” in which the epistemology of economics was argued between historicists (economic history), logical positivists (emulators of the natural sciences) and praxeologists (methodological individualists and deductive logic). These economic methodology debates quickly became radical in nature, leading to the first charges against rationalism in all of scientific debate which up to that point had accepted human logic as universal and immutable. Such criticisms bring into question ALL scientific findings, but they are really aimed only at economics specifically. Thus, Mises wants to ground economic theory in the general theory of human action to demonstrate it’s universality and defend it from polylogist and anti-rational criticisms.

3. Economic Theory and the Practice of Human Action

Economics receives criticism as being an imperfect science. All science is imperfect, and is subject to change and improvement over time. One major school of criticism comes from naturalist scientists who blame economics for not adopting their own methodology— they suffer from a narrow focus and can not see the virtue in doing things any way but their own. The other major school of criticism is that economics hasn’t solved all social problems, so it must be barren. This perfectionist fallacy ignores the great progress economic theory in action has achieved so far, such as the “Industrial Revolution”, which was directly enabled by progress in economic thought applied to the political realm which freed the energies of entrepreneurs and creators. The modern era is characterized by ignorance and hatred toward economic science, it is also an era of social disintegration, wars and mass social calamities. The fate of civilization’s progress and the progress of economic science are directly intertwined.

4. Resume

Mises wrote this book to situate economic theory within a wider body of human choice, known as praxeology. He did this to defend it from its critics, but also to expand the breadth and knowledge of the science to gain new insights on social phenomena. In that sense, Mises’s book is both reactionary, and revolutionary.

Part One, HUMAN ACTION, I. Acting Man

Human action is the study of means used to obtain certain ends. It does not study the ends themselves nor does it administer judgments about personal values. Human action is purposeful action, it is not animal action, instinct or reflex. And it does not concern itself with the reasons for ends being chosen. Within the framework of human action, all actions taken are either effective, or ineffective, they can never be judged as irrational or rational. For man to act, he must be aware of causal relationships that he believes he can influence. Human action demands methodological dualism— human action is assumed as an ultimate given, it is beyond the scope of praxeology to investigate causes antecedent to it. Human action is a necessary category of the life of man, he can not avoid choosing in the act of living, life itself being a choice over death. What man strives for in acting is to relieve felt uneasiness— some call this happiness but it is not an objective category and can best be thought of as an improvement in his position as judged by himself, though happiness is a commonplace referent for the concept. Positivism demands an experimental, inductive, natural sciences approach to knowledge of human action yet it tacitly accepts the methodological dualism of praxeology in appealing to man’s rational mind to consider an alternative way of performing economic science.

II. Epistemological Problems of the Science of Human Action

Praxeology and history are the two main branches of the science of human action. History is a collection and systematic arrangement of data of human action experience in the past; it can not tell us anything that is valid for all human action and thus can not predict anything about the future, it can only tell what has taken place before. Complex phenomena with interlaced causal chains can not be used to validate an existing theory— the natural sciences require the ability to set constant all entities but one variable which is then tested. All human experience is filtered through human reason, which is a priori valid and universal to all individuals. It is the unique structure of the human mind and it is impossible to conceive of or interpret human experience other than through the logical structure of man’s mind. This gives rise to methodological apriorism, which means that it is impossible for man to conceive of a reality in which the fundamental logical relationships of his mind and his understand of causality do not hold. “Human knowledge is conditioned by the structure of the human mind.” Primitive man who is said to understand miracles is a man who has a difference of content of thought, not of the process of thought itself— the attribution of miracles to life phenomena was an early attempt at establishing causal relationships in the world around man. The concept of action implies belief that the means chosen are valid and that the end sought is valuable— it does not imply that the action is guided by a necessarily correct theory or appropriate technology for achieving the end sought. Action == reason, action is how man effects his reason in the world around him. All human experience must be filtered through pre-existing logical categories, for example, experience of money requires knowledge of the theory of medium of exchange to make sense of the data of money. “It is the meaning which acting individuals and all those who are touched by their action attribute to an action, that determines its character.” In this way, collective entities can have meaning for man’s actions even though methodological individualism holds, which implies that only individuals are capable of acting. “There is no social collective conceivable which is not operative in the actions of some individuals.” Methodological collectivism is revealed to be a false idol when considering the fact that there is a multiplicity of coexisting social units and mutual antagonisms— which social collective is “acting” in this case? Human action also follows methodological singularism, it is convened with concrete action of a definite person, at a definite date and a definite time, not action in general. Praxeology is causal-realist— what happens in acting? what does it mean to say that an individual did X, at Y place and Z time, and not A at B place and C time? What is the result of him choosing one thing and setting aside another? Human life is an unceasing sequence of individual actions, though these actions may be taken in the context of a larger project to which they belong. For example, “A cathedral is something other than a heap of stones joined together. But the only procedure for constructing a cathedral is to lay one stone upon another.” Historians must select which data are valuable to study by referencing a specific end or theory which they are using to make their choice. The historian seeks at “verstehen”, or understanding, he does not make up facts or interpret data as he likes but applies all his best knowledge of existing science in other branches to understand the “meaning” of the data he looks at— its implications and significance. However, this “understanding” is always limited by the current state of the underlying sciences he depends upon. Empirical data by itself is seen to be hollow when we acknowledge the recording of miracles and witchcraft by numerous human witnesses in past history— these events can not have logically occurred even if we have collected data of people verifying them in the past. Where the underlying science is unsettled, history may prove to be “open to interpretation” as to the significance of events recorded. There are no constant relations in the field of economics and so establishing things such as the “elasticity of demand” of a good are nothing more than historical facts, not future-predicting theories of human action. “Happiness” is not an inappropriate measure of human action due to technological limitations but because it is not objective and universal in its implications— it means different things to different people. Logic, mathematics and praxeology are universally valid for all humans capable of reason. “What counts for history is always the meaning of the men concerned.” All historical events are described and interpreted by means of ideal types, e.g., general, president, businessman, entrepreneur, doctor, tyrant. But ideal types belong only to history— human action concerns itself with real acting man as he is, which is the mistake made by the German Historical School or the American Institutional School, which built their theory around the “ideal type” of “homo economicus”. This was a make believe intellectual phantom with no connection to real, acting man. “Praxeological knowledge is within us” and is in this sense experience based, but it is something that belongs to everybody who is capable of human reason, and no amount of experience or description to an entity not capable of it could lead to their understanding. “The end of science is to know reality”, and we use our experience of daily life to decide what interests us and what we should explore, but not how we should explore it (theory building). Economic theory refers to practical problems simply because that is what man is concerned with understanding. Economics is necessarily politically contrarian because it serves to provide knowledge of the limitations of human action and thus the necessary restraints that exist for human legislators and warlords in their social engineering endeavors. Economics is holistic, special theories of economics must be encased in a greater framework which is itself consistent in order for special theory to be valid. Praxeology belongs only to man— superhuman entities capable of anything would not fit into a theory involving entities which have limited means of satisfying their ends.

III. Economics and the Revolt Against Reason

The classical economists destroyed all socialist theories and demonstrated their impracticality. Instead of admitting defeat because they could not construct a logical theory, the socialists turned to questioning the efficacy of human reason itself. They decided to substitute mystical intuition for universal logic (similar to divine right of kings for monarch). Marxian polylogism states that every social class has its own distinct logical structure within the mind. There is no biological support for this assertion and Marxists make no attempt to establish anything beyond this assertion. Marxian “ideology” is a doctrine which is incorrect from proletarian pure logic but which is beneficial to the class interests of the one who espouses it. Marxists provide no explanation for why minority policies which are deemed injurious to the wider social body nonetheless come to pass without the majority stopping them. “The fundamental logical relations and the categories of thought and action are the ultimate source of all human knowledge.” We can not even imagine a system that operates otherwise without referring to this logic in our inquiry, and we can not explain logic without using logic. This means logic is an ultimate given. Polylogism scan not explain why people of the same social class nonetheless arrive at different conclusions about the truth.

IV. A First Analysis of the Category of Action

Economics concerns itself with the way thinking man turns things into means by way of action. It is concerned with the meaning men give to things through their action and not what third parties think about such action. Man’s ends can be thought of as existing on a scale of values, which are ordinal. It is a simple rank of things he’d like more over things he’d like less, the satisfaction of which serve to remove felt uneasiness. These scales don’t exist in any real sense and are simply a tool used to understand the concept of action, and they are revealed definitely only through concrete action. The values that things have are within the person of whom action is taken, they are not intrinsic to the things themselves. Economics concerns itself with what man DOES do, not what he should or ought to do, e.g., prices of “sinful” goods must be explained from the way men value them, not how an ethical system claims they should. Action can be thought of as an exchange, where a less satisfactory set of conditions is given up for a more satisfactory set of conditions. Costs are the value of the next best thing given up. Profits are the excess of gains over costs. Anytime costs exceed gains, loss is incurred.

V. Time

Change and time are two aspects of the same phenomenon. Thinking takes time and is itself an action. Action is always aimed at altering the events of the future because the present moment is fleeting. The present is an ideal boundary line separating the past and the future. The past is designated as the place where opportunity to consume or do has passed. The future is designated as the place where the opportunity to do or consume has not yet taken place. The present is the place in which it is too early to do some things and too late to do others. The uncertain nature of the future means that we have a vague notion at any given moment of how much of our action we can consider “now” or present. Time must be economized like any other good due to the fundamental nature of reality. Actions are never synchronous, they always are in a relation to one another of being sooner or later. Man’s values and thus actions can change over time. There is a difference between logical consistency, and praxeological constancy. Irrationality does not apply.

VI. Uncertainty

“To acting man the future is hidden”, it is possible in a metaphysical sense that events are entirely deterministic but this is not the experience that man himself faces; he faces an experience of choice. In matters of uncertainty, acting man faces two kinds of probability, class probability and case probability. In class probability, the actor knows all qualities of the class itself, but knows nothing of the character of any specific event which might take place within that class. In case probability, he knows some of the factors guiding the outcome of a specific event but not all of them and the outcome itself is unique and not categorizable with other “class” events. The case is characterized by its uniqueness, not its similarities, to other identical events. Human action is based upon case probability, where no safety or stability can be purchased or achieved— all human action is inherently speculative with regards to the likelihood of a given action achieving the aimed at end. Case probability can not be quantified because it would require the summing of non-identical items. And game theory is an inappropriate means to study human action because human action in the division of labor aims at benefitting all participants, not just sum (i.e., zero sum game). Competition has been wrongly characterized as a form of combat when really competitors win their customers by achieving excellence and preeminence. All allusions to military terminology or characteristics is purely metaphorical. Because praxeology studies multi-causal events, its prediction is necessarily qualitative and reliant on “understanding” (verstehen), it can never be quantifiable or mathematical in nature and there can never be any certainty with regards to its outcome.

VII. Action Within The World

Utility is that which has causal relevance to removing felt uneasiness. Subjective use-value utility is different than objective (or technological) use-vale utility. Objective use-value may be obscured, incorrectly utilized or multiplicitous in comparison to subjective use-value. Acting man does not choose between total supplies of various goods serving as means— he chooses only between the relative, discrete amounts for his purposes against other ends he could pursue. And because he satisfies his most urgent wants before his less urgent wants, he values the means “at the margin”, meaning in consideration of the value of the least urgent want he’d have to give up. The law of diminishing marginal utility is implied in the category of action. It is futile to attempt to calculate composite values of total supply based off of knowledge of partial supplies— this is not how acting man utilizes discrete amounts of supply. Supply itself is characterized by a set of homogenous goods which could equally satisfy a given want. Technological recipes are not part of supply, once known they are inexhaustible and can be used as many times as is desired— however, the action leading to their discovery does involve scarcity and supply. The law of returns simply states that for any combination of real factors of production there is an optimum in relation to the productive end desired with regards to most efficiently utilizing scarce resources. It can only tell us that there is an optimum. It can not tell us how to arrive at it— this is something that must be achieved through experience (technological vs. teleological knowledge). The law of returns applies to all branches of production equally. The indivisibility of certain means of production is what gives rise to the fact that often large-scale production is more efficient and therefore optimum than small scale variants. Labor is the employment of human physiological capacities as a means of obtaining desired ends. Leisure is preferred to labor and labor itself suffers from the law of diminishing marginal utility. Additionally, not all labor is equal in quantity and quality within an individual or population. “Men do not economize labor in general, but the particular kinds of labor available.” The supply of labor available is conditioned upon genetics, social conditioning and innate human subjective preferences for labor vs. leisure. The potential supply of labor for each kind of work necessarily exceeds the demand in the long run because labor can be shifted and retrained to perform new tasks. Labor is always more scarce than the material factors of production (land, capital). The substitution of “labor saving” machinery for human labor does not render labor abundant so long as there are still more material productive factors available to combine with the freed up labor to pursue additional human well-being. Activities which provide immediate gratification are not labor nor work but consumption goods themselves, of the first order. Mises believes the creative genius is a special case which does not subscribe to the praxeological laws conditioning labor and is more equivalent to “manna from heaven” in that he toils under different conditions, for different reasons, and he can not be substituted, ordered/planned nor replaced. Production is not a creative act but one of rearrangement of already existent phenomena. Man is creative only in thinking, not rearranging the world according to his thoughts. Man’s capacity to work is a given much like the state of natural resources and animal substances. The material changes of man’s economy are due solely to the ideas he holds in his head about what is desirable. “Production is alteration of the given according to the designs of reason.”

Mises was attempting a scientific analysis of the socialist program as a philosophical and economic doctrine. Up until this point in the development of ideas (1922), most writings on socialism concerned themselves with ideological propaganda and sloganeering, with socialist supporters actively trying to prevent people from a scientific examination of social problems and the socialist response. Mises wanted to explain: what is socialism? how does it compare to capitalism? what claims does socialism make about society? are they true? what can we expect the world to look like under a socialist order?

What the heck is Mises saying?

Some people find Mises’s writing confusing. He uses big words (“panegyrists”) and archaic or seemingly obscure references (quotes in Latin, nods to long-extinct philosophical schools). Mises possessed a Classical education like many educated Europeans of his time. He saw himself as part of a grand intellectual tradition and sought to make his own contribution to a shared Western civilization that had taken over two millennia to develop. He saw himself as a scientist of social phenomena responding to important debates and schools of thought of his era. He was often speaking TO a particular person, school or idea which was well-known and publicly debated in his day. Finally, he is a systems-builder. He always starts with a foundation, then adds a block, adds a block, adds a block. At the end one finds oneself standing atop an intellectual skyscraper they didn’t realize they were building when they started reading.

What are the biggest ideas in “Socialism” (Chapters 1-4)?

If you remember only a few things from the first hundred pages of Socialism, remember these quotes and try to think about their significance:

“The word Capitalism expresses, for our age, the sum of all evil. Even the opponents of Socialism are dominated by socialist ideas.“

“To drink coffee I do not need to own a coffee plantation in Brazil, an ocean steamer, and a coffee roasting plant, though all these means of production must be used to bring a cup of coffee to my table. Sufficient that others own these means of production and employ them for me.“

“If the State takes the power of disposal from the owner piecemeal, by extending its influence over production… then the owner is left at last with nothing except the empty name of ownership, and property has passed into the hands of the State.“

What is “Liberalism”?

Mises’s Liberalism stood for the essential social principle of a social order built on respect for private property rights and contractual negotiation of social conflicts. In other words, peace abroad, freedom at home and an economic system consisting of nothing more than “consumer sovereignty” over the productive process and voluntary exchange within the confines of the marketplace. This was once an intellectual project of thinkers of all nations and ethnicities participating in “Western civilization”. Today, Liberalism lives on most strongly in the ideas of the Libertarian movement, which was originally a mostly American project ironically kick-started in large part by the publishing of Mises’s “Human Action” in 1949. Today, socialists have co-opted the Liberal name, having rightfully seen it as valuable due to its old popularity and intellectual prestige.

What is Socialism?

The demands of the socialist program have changed over time but they have come to settle, as Mises said, on the idea of “a policy which aims at placing the means of production in the hands of the State.” It is the antithesis of the private property order of Mises’s much-cherished Liberalism, and diametrically opposed to the “consumer sovereignty” of the marketplace, replacing it with production, organization and exchange according to the “will of the people.” But how, and why, could these two concepts be different? That is the heart of Mises’s book-length analysis. According to Mises, Socialism is Utopian by nature. It promises to deliver a perfect economic, political and social environment where all inequalities and disputes are resolved forever and the end of history, in the sense of a constantly-evolving, ever better social order, arrives.

Do Liberalism and Socialism have conflicting ends?

No! And this is the most fascinating part of the analysis. Socialist propaganda strives endlessly to create contrast between the goals of Liberalism and the goals of Socialism. And while it is true that Liberalism does not share all the concerns of Socialism (mostly because it has deemed these concerns to be impossible or nonsensical), the goal of both is to raise the material standard of living of humanity as a whole. The only thing that differs is the means chosen to secure those ends. But it is that choice which ultimately makes all the difference.

the economic concept of ownership has to do with “having”, that is making use of the benefits of a particular good, whereas the legal concept of ownership has to do with whom the benefits rightfully belong to

consumption goods can only be owned, economically speaking, privately on an individual basis

production goods can have joint ownership in a legal sense, but it is the ultimate consumers of the output of production goods who own them economically because they are the ones who enjoy their benefits, in a division of labor society

in an autarkic society, the user can also be the owner of the production goods because all output serves to benefit him, but in a division of labor society the user of the production goods decisions are guided by the demands of end consumers who have economic ownership of them

violence and contract

all economic ownership derives from occupation and violence

all legal titles followed back in time must originate in appropriation of common goods

law arises when society comes together to recognize current ownership with legal title, thus ending the war of all against all

law and the State can not be traced back to contracts, they came into being in conditions of lawlessness and the absence of contract

“economic action demands stable conditions”; long-term productive processes can not exist in conditions of violence; peace is the aim of law, which allows for long-term economic action

law defends property in the interests of peace-making; all violence is aimed at property of one form or another

“Law cannot have begot itself of itself… in complaining that Law is nothing more or less than legalized injustice, one fails to perceive that it could only be otherwise if it had existed from the very beginning” (consider Proudhon’s “Property is theft”, how can one define theft in the absence of property?)

Law set to formalize a set of conditions which were then existing, and from which standpoint all future actions were to be judged

“Law did not leap into life as something perfect and complete. For thousands of years it has grown and it is still growing. The age of its maturity, the age of impregnable peace, may never arrive.”

three types of law, in order of economic importance

Private Law: regulates behavior between individuals

Public Law: regulates behavior between individuals and community/State

International Law: regulates behavior between communities/States

today, the principle of violence has been completely abandoned in Private Law; violent revolution is slowly being abandoned as a principle of Public Law and International Law is still in large part governed by the principle of arbitrary violence

the theory of violence and the theory of contract

liberalism, the principle of contract/Law dictating human society, takes time to develop and is the realization of a conscious effort guiding social life

“All anti-liberal social theories must necessarily remain fragments or arrive at the most absurd conclusions”

critics charge Liberalism with focusing only on earthly delights; it is an empty charge because Liberalism admits this; Liberalism promises nothing besides abundant material commodities, it doesn’t concern itself with The Greatest Secret of Man

urban settlement is an outgrowth of the division of labor/exchange society promised by Liberalism

Social philosophy must be earned with effort; immigration waves from country to town have often threatened to upset Liberal social order because immigrants are slow to adopt new modes of thinking (country bumpkins)

many Liberal civilizations have been ruined not from without by barbarians, but from within by seeming-citizens

theories based on struggle as the motive power for society deny a role for social cooperation, yet social cooperation is the essence of social theory

the strongest argument of imperialism is the idea that each country should have ownership over the essential means of production (economic nationalism); but if this principle were true, that one can not derive economic benefit from goods one does not legally possess, then why shouldn’t EVERY man possess these essential means of production for himself?

imperialism and socialism agree in their criticism of liberal property rights/ownership, but socialism seeks to divise a closed system of a future social order which imperialism could not

collective ownership of the means of production

the intent of early reforms of property rights was to provide equality in the distribution of wealth

a railway, a rolling mill, a machine factory can not be distributed; equal ownership principle has been abandoned in favor of the idea of social (State) ownership of the means of production

“Our whole civilization rests on the fact that men have always succeeded in beating off the attack of the re-distributors” lest economic regression take hold

this new idea for socialism is shaped by the private property order, it could not have occurred in its absence and it is a compromise of socialist philosophy because it realizes abandoning the social division of labor would totally destroy man’s economic life as we know it

in this sense, socialism IS a consequence of the liberal social order

socialism claims for itself a grandiose enterprise; it can not be thrust aside with one critical word but deserves a full response

theories of the evolution of property

it is an old political trick to try to found your ideal in a “Golden Age” of the long ago, since corrupted

Liberalism stresses the important development and “evolution” of civilization caused by private property in the means of production; Marxism plays to the idea that private property was an evolution, but a corrupt form

the historical record of private and “public” property is mixed and not certain, the idea of founding a theory of property rights on timeless history is flawed and untenable

regardless of the historical question, it is a separate problem to demonstrate that rational agriculture and other forms of economic development could be carried out in the absence of private property as an institution

Chapter II, Socialism

the State and economic activity

“the aim of socialism is to transfer the means of production from private ownership to the ownership or organized society, to the State”

limitation of the rights of owners as well as formal transference is a means of socialization (ie, regulation)

piecemeal socialization via regulation leaves the owner in position of owning an empty title, with true ownership/property rights resting in the State

Socialism and Liberalism have the same ends, but they choose different means for attaining them

the “fundamental rights” of socialist theory

culture is the true safeguard of rights, not legal formalities; numerous nations have legal guarantees of rights but culture is not widespread enough to support their consistent application

most of the time the economic rights dictated by socialism are for sloganeering purposes, or to act as a critique of the existing order; they don’t consider whether institutiing them legally is enough to change the social order and take this idea for granted so far as they believe in it

three fundamental socialist rights:

the right to the full produce of labor

this can only be had in a competitive process of buying and selling which dictates to each element (labor, capital and land) its respective value based off the subjective theory of value

this idea has always come to logical ruin and so the compromise is the idea of abolishing all “unearned” income via means of state control of the means of production

the right to existence

the idea of guaranteeing minimum existence was achieved in most communities by means of charity long ago, and is thus a harmless idea

what socialists actually mean is that every individual have their needs met based on the means available in the community, before the less urgent wants of others are met

the impossibility of judging the urgency of needs objectively means in practice this is simply a call for equitable distribution of society’s total wealth; “no one should starve while some have more than enough”

it is an idea fundamentally incompatible with the concept of private ownership because it will demand collective ownership in order to be realized

the right to work

the idea here is that people have the right to a job they enjoy that provides them a minimum level of subsistence with regards to their wants

it owes heritage to the idea that Nature was superabundant and everyone could fulfill his needs easily in this primitive state and so to “buy” man’s cooperation with society, which denies him this superabundance, some compensation must be made

it ignores that Nature is full of hardship and man enters into society because it is more productive, not less

unemployment is caused by economic change, and where it is not hindered by regulation it is a transitory affair

socialism, too, would need the ability to move labor to its most highly valued role; the idea of guaranteeing people a minimum income in their chosen work is absurd and ignores the demands of economic change

these 3 rights could be larger or smaller in number and today have been superceded by the idea of socialization of the means of production

collectivism and Socialism

society is only possible to the extent that the individual finds his ego and will stenghtened by participating in the collective; the idea of a combat between the collective and the individual was false and a red herring used by collectivists interested in protecting the interests of various ruling classes

collectivism rests on a teleological problem, that is it purports to explain human action based on a purpose served rather than individual causes

collectivism posits the State as a God directing society toward a higher purpose; it assumes a war of all against all exists in society and individuals must be forced against their better interests to move in the direction of their divine purpose; that no peaceful social organization is possible

science of society begins by removing this dualism and with it the need for gods and heroes; human action in social cooperation can be explained by the simple idea that man sees more benefit in cooperating than he would achieve left on his own

collectivist philosophy is barren in terms of producing economic theory; it wasn’t until the “German mind” was freed of the collectivist philosophy of the State that pathbreakers like Menger, Bohm-Bawerk and Wieser were able to make important contributions to economic science

collectivists refer to the social will but can not consistently explain its origins, which are based on individual political, religious or national convictions

collectivism is political, not scientific; it teaches judgments of value

collectivism tends to be closer to the world philosophy of socialism but even some collectivists have advocated private property in the means of production (socialism != collectivism)

Chapter III, The Social Order and The Political Constitution

the policy of violence and the policy of contract

in a state of nature, “the Law of the Stronger”, the negation of law, exists; no peace, a truce at best

society grew out of the smallest associations agreeing to keep the peace and expanded outward from there

the policy of contract has nearly fully captured questions revolving around property, but political domination is still determined by the ancient means of arms, although this too is beginning to come under a set of rules

in response, the nature of war has come under the influence of “Just Cause”, the policy of naked aggression tending to attract powerful anti-coalitions

Liberal social policy teaches that war is harmful to the conqueror and the conquered; society is built through peace; peace is the father of all things

Liberalism’s aim at protecting property, and avoiding war, are expressions of the same principle of peace

the social function of democracy

the highest political principle of Liberalism is self-determination of people

for Liberalism, democracy performs functions that men are not prepared to do without

many claim the aim of democracy is to select political leaders, but there is no inherent reason why democracy should choose better leaders than any other form of government

the true function of democracy is to make peace, to avoid violent revolutions; persons and systems in the government of non-democratic states can only be changed by violence

democracy attempts to economize on the loss of life and property, the interruption of economic activity, which comes with political revolution by bringing the will of the state in accordance with the will of the majority; it is a policy of internal pacifism to complement external pacifism of the Liberal order

history bears out the truth of this function when looking at the relative stability of the English social order since the 17th century versus the instability and violence of the monarchies of Russia, Prussia, Germany and France

democracy seeks to extirpate revolution; in this sense Marxism is anti-democratic; “Liberalism wants success at the smallest price”

direct democracy is not necessary as long as the principle of the will of the state conforming with the will of the majority is attained

democracy should be carried out by professional politicians so long as they represent the will of the majority

there is no difference between the unlimited will of the democratic state and the unlimited will of the autocrat; both rest on the notion of a state based in pure political might

it is a formal mistake with grand consequences when a legislator believes he is free from material considerations because all law emanates from his will; he is not above the natural conditions of social life

“Democracy without liberalism is a hollow form”

the ideal of equality

it is said that socialism necessarily grows out of democracy because democracy requires equality to function

the principle of equality of all before the Law is an essential peacemaking principle because without it people have common interest in subverting the law and ending the peace to get what they want

another reason for equality before the law is to ensure that the ablest producers are ably legally to come to possess the means of production, which has outstanding benefits for all of society

all democracies have foundered on the spirit of pitting the poor against the rich, people who are unequal in material means despite being equal in legal means (supposedly)

the idea of equality arising from a pro rata distribution of the national income is not inherently democratic and should be judged on the basis of its own effects, not as a principle of democracy

Democracy and social-democracy

the idea of democracy and socialism being wedded intellectually comes from the followers of Hegel who believed in the idea of social evolution; because democracy and socialism both were arrived at thorough political and economic “progress”, they were deemed to be compatible

“Democracy is the means toward the realization of socialism, and socialism is the means toward the realization of democracy”

the other idea was that socialism would bring paradise on earth, so it seemed odd if this paradise offered anything less than the “best” political circumstances as well

people ultimately diverged on whether or not it was okay to deviate from the principles of democracy on the way to socialism, ie, the dictatorship of the proletariat

socialism’s critique of “capitalist” sexual relations starts from the premise that a Utopian Golden Age existed in history and sexual relations have degenerated from that point to the current capitalist paradigm

man and woman in the age of violence

“unlimited rule of the male characterizes family relations where the principle of violence dominates” (see: Mafia families)

in this situation, woman is an economic good that man has and makes use of; she is the servant of man because man has the power and and thus the rights

the man can divorce the woman, but she can not do the same to him

love is the anti-thesis of this system because it involves “overvaluing” the object, woman is a queen, rather than a slave

love creates conflicts in this system only from the point of view of the man, who can not stand his property (woman) being possessed by another

marriage under the influence of the idea of contract

capitalism is blamed for bringing money marriages and prostitution and sexual excess; before this love was pure

polygamy tends to accompany the principle of violence because women are property and men wish to acquire as many as they can defend

as women came to possess property and wealth and marriage with them granted access to that property, clear delineation between legitimate and illegitimate connection and succession developed, that is, contract

the idea of contract breaks the rule of the male and makes the wife a partner with equal rights

women were freed from men for the first time when their rights were legally enforceable as contracts

the problems of married life

modern contractual marriage involves conditions by which marriage and love are united; it is morally justified only when love is involved

most of the problems of married life come from the fact that it is a contract for life yet biological passions and even philosophical love may be of limited duration

these problems are internal in nature, not external; they’re due to individual psychology, not the capitalist social order

the feminist movement claimed that marriage forced women to sacrifice their personality and the only solution was abolition of the institution

women are faced with a unique choice: to spend the best years of their lives as mothers, or pursuing their personalities, but rarely both

so long as feminism desires for woman the legal freedom to develop according to her own will, it is a partner of Liberalism

to the extent feminism seeks to reform institutions in an attempt to reform unalterable facts of nature, it is a child of Socialism

free love

socialism aims for free love by abolishing economic necessity and social institutions which previously hampered relations between the sexes

sex is less of a burden for man because the nature of the act for him is less demanding; for women it brings with it the risk of child birth which can be a sincere distraction from her inner development

prostitution

prostitution goes back to ancient society and is a vestige of old morals, not new

women prostitute themselves for different reasons, only one of which is money

capitalism loves peace, yet militarism is one of the primary “patrons” of prostitution

in a society of equal means the economic motives for prostitution may dwindle, but there is no reason to believe other new social sources would not arise in their place

“Playlist” driven lesson plan; students work through pre-assigned steps on tasks of interest

Surveillance; students are recorded with video and audio for later playback and analysis by teachers

Big data; used to analyze student progress and adapt lesson plan to strengths and weaknesses

Private tuition, approx. $30,000/yr

According to the editor’s tag on the article, AltSchool is an example of “Silicon Valley disrupts education.” In the disruption literature there is the idea of disruptive and sustaining technologies– disruptive technologies create a paradigm-shift in the strategic world upon which the industry in question competes, while sustaining technologies simply allow for more efficient continuation of the existing competitive dynamic. Better horse breeding practices are an example of sustaining technology in the era of the horse and buggy, while the internal combustion automobile is an example of a disruptive technology in personal transportation.

If AltSchool is disruptive technology, then the questions are:

What is the primary strategic principle for mainstream education?

How does AltSchool represent a paradigm-shift?

It’s perhaps difficult to say exactly what the principle of mainstream education is. There are many interest groups who vie for influence over the system so it is by no means a monolithic group. That being said, there is perhaps a cohesiveness of interests: provide jobs and economic resources for “educators” and administrators (including the politicians who are the ultimate stewards of the system) while creating a student body that will be cooperative with the political system around it and willfully integrate into the various economic relationships that sustain it. “Question everything” this is not.

The AltSchool gives meek lip service to the idea of an individual-oriented learning experience, but upon further investigation it seems that this is not about making the student the master of his education, but making the education a more subtle component of the student’s social indoctrination.

Ventilla [the founder of the company] also wanted students to focus on developing skills that would be useful in the workplace of the future, rather than forcing them to acquire knowledge deemed important by historical precedent. “Kids should be spending less time practicing calculating by hand today than fifty years ago, because today everyone walks around with a calculator,” Ventilla told me. “That doesn’t mean you shouldn’t be able to do math—I shouldn’t have to whip out my phone to figure out if someone gave me the correct change. But you should shift the emphasis to what is relatively easier, or what is relatively more important.”

While there isn’t necessarily anything blame-worthy in being mindful of conditions in the workplace which students might one day be interacting with, it also isn’t exactly revolutionary to incorporate job-worthiness into one’s educational philosophy. The “workplace of the future” is an extrapolation of the “workplace of the present” into future periods.

In San Jose, students’ scores on annual state tests were made available only after the end of the school year. At AltSchool, Seyfert could keep tabs on her students’ daily, if not hourly, progress. Every task card on a student’s playlist is tagged to denote not just academic skills, like math and literacy, but also social and emotional skills.

What is the value of all of these statistics? If you are teaching to a standard (ie, you have an end goal in mind of what your student should “look like” when their education is “complete”), then being able to measure progress toward that standard would be instrumental. The application of technology to this problem of measurement might introduce some efficiencies or even capabilities that are impossible without it. But then, this wouldn’t be a disruptive innovation but rather a sustaining innovation.

If your methodology is centered around the development of the individuality of the student himself, then the best such statistics can provide is a description of strengths and weaknesses. There would be nothing actionable as there would be no specific goal. Suzie is good at math. Jerry is good at reading. But what of it? And even then, these descriptions would only be valuable to compare Suzie and Jerry to others, but what value are such comparisons to the individual being compared? He cares not for it.

Like other AltSchool teachers, Seyfert was drawn to the startup because of its ambition to make systemic change. Two or three times a week, she told me, she gives colleagues feedback about the school’s digital tools. The Learner Profile, Stream app, and other tools are only about a year old, and AltSchool’s personalization still requires considerable human intervention. Software is updated every day. Carolyn Wilson, AltSchool’s director of education, told me, “We encourage staff members to express their pain points, step up with their ideas, take a risk, fail forward, and fail fast, because we know we are going to iterate quickly. Other schools tend to move in geologic time.” (Ventilla may question the utility of foreign-language acquisition, but fluency in the jargon of Silicon Valley—English 2.0—is required at AltSchool.)

The obsession of the school seems to be in building excellent quantitative measurement tools. These pieces of software can be updated and tested rapidly. But the educational principles themselves produce effects which are long in both maturation and duration. We can’t be sure of their results until many years have passed, if even then, and they’re most easily tested through logical inquiry, not mathematical interpretation. As human nature and cognitive capability are not improving any faster than iteratively through “geologic time”, it’s unclear what value these rapid upgrades to the software provide to the improvement of the philosophic principles of education that have supposedly been disrupted by AltSchool.

There was some humorous contrary evidence:

The previous day, Otto said, a guest teacher had come in to lead several students in a 3-D-modelling project, using a Web site called Tinkercad. “We built little models online—some people built phone cases, or little towers, or yo-yos,” Otto said. “I built a toilet, because I thought it would be fun. It has lots of different components—you have the base, you have the seat, you have the back.” He clicked to the site and pulled up his model. “I was looking around at pictures of toilets online,” he said. “I think I want to make it a bit more shaped for your back. I also want really sanitary toilets. And I want to make it really comfy. I’m quite bony, and I’m small, and if they don’t have a cushion they hurt.” Eventually, Otto said, he planned to 3-D print his prototype: a model toilet, fashioned to his personal specifications and preferences.

I really enjoyed this comment and I am glad the journalist captured it. First, it suggests that maybe the AltSchool is creating some spaces for the individual student to explore their interests, deeply. Second, Otto comes from a financially successful family whose parents are accomplished corporate types. It seems that, given the freedom to pursue his own interests, he can think of nothing better than building a comfortable toilet. That must give mainstream educators (and maybe even his ambitious parents) the chills!

If you can pull your own preferences out of your head for a moment and just look at this boy’s effort from his own perspective, though, isn’t it glorious?

The point of the hackathon was to sketch out in code potential solutions to “robot tasks”—routine aspects of a teacher’s job that don’t require teaching skills. Kimberly Johnson, the head of product success and training, addressed the team. “Basically, what we have told teachers is we have hired you for your creative teacher brains, and anytime you are doing something that doesn’t require your creative teacher brain that a computer could be doing as well as or better than you, then a computer should do it,” Johnson said.

Since the previous hackathon, three months earlier, teachers at AltSchool had filed more than a hundred digital “tickets” to Johnson, indicating how AltSchool software might be improved. Some teachers had asked for a more streamlined way to input data. Johnson acknowledged, “It is a lot of work to go into each card and click the learning objective and click the score and click ‘save.’ It’s just four or five clicks, but it adds up.” The teachers also wanted to enter assessment scores to groups of kids at once. “If you say, I want to give all of these kids threes, and all of these kids fours, there must be an easy way to do that,” Johnson said. “I don’t know what it would look like, but you could probably hack something together.”

Again, the emphasis on data technology over teaching philosophy. Now, it sounds like the school is trying to free up the teachers to focus on teaching by improving their technology interface. But the question begged is, “What makes the technology interface so central to their teaching philosophy?” This comes back to the question of disruptive versus sustaining technology. How is the student served by all the assessments? Life is its own assessment.

But AltSchool’s philosophy of education is also essentially utilitarian, even as it celebrates the individuality, autonomy, and creativity of its students. It holds that children should be prepared for the workplace of the future—and that the workplace of the future will demand individuality, creativity, collaboration, and critical thinking.

We turn now to that great social philosopher, Ludwig von Mises, who said of genius and the creation thereof in his “Human Action“:

The genius does not deliver to order. Men cannot improve the natural and social conditions which bring about the creator and his creation. It is impossible to rear geniuses by eugenics, to train them by schooling, or to organize their activities. But, of course, one can organize society in such a way that no room is left for pioneers and their path-breaking.

Now here are two very different philosophies. At AltSchool, “individuality” and creativity are being taught as part of the lesson plan and the methodology of the school in service of the demands of a future workplace so envisioned. For Mises, the creative individual is something natural, inexplicable and uncontrollable and he is in service to himself first and foremost.

I think it is Mises’s ideas that are disruptive here.

AltSchool’s perspective does not necessarily require abandoning texts that have long been considered central to a humanist education, but it does mean approaching them anew. One middle-school class undertook a lengthy study of the Iliad by focussing on the theme of “rage” and designing a spreadsheet that logged instances of it. They then used data-visualization techniques to show their findings, and wrote persuasive essays based on their results. Afterward, their teacher, James Earle, wrote, “Analyzing a piece of literature this way turns the work into a piece of robust data that can be understood quantitatively, in addition to allowing a qualitative reading.”

But what is the value of this new understanding? What does it add that is new and different? Yes you can do this, but what thinking informs the should?

Mediratta [vice-president of product] envisaged a time when AltSchool technology would get “into the sci-fi realm.” What insights might be drawn from aggregated data culled from video and audio? He spoke of the video moments that teachers were bookmarking. “The next useful thing would be for us to analyze all the things that are bookmarked, and to draw inferences,” Mediratta said. “Like, bookmarks seem to happen when the classroom is noisy. So let’s generate a few other interesting moments that the teacher might want to look at—say, a moment when the classroom was full of kids but was dead quiet. What was happening there? Is this good? Is this bad? Or you could look at a moment when it was absolutely chaotic—but maybe that is what the activity called for. So we can start applying machine learning to this data to start driving inferences. Maybe what we should be doing is detecting when the classroom gets noisy, and then we could have the head of the school, who is also an educator, stop by your classroom and participate and help.”

The meta-philosophy of modern education is control, the schooling agenda is a by-product of the aim to control others. The desire to control the schooling environment seems to be what is behind the focus on applying technology to surveil and measure the students and their activities.

AltSchool is not disrupting anything as far as I can see. From my understanding of what education is and what education isn’t, I don’t see a place like AltSchool meeting my needs, but that does not mean it won’t be successful in terms of the paradigm of mainstream education, within which I believe it is situated.

What Makes Sammy Run? (WMSR) is a work of fiction and judging by the title, you’d think the book is about Sammy Glick, the eponymous antagonist. Certainly that is what many reviewers, readers and critics seem to focus on. But WMSR isn’t about Sammy– it’s about the people around him, who tolerate and even tacitly support him, who enable his antics in various ways and thereby lower themselves in the process. WMSR isn’t a study in lite social tyranny, as some think, but rather it is a study in the Stockholm Syndrome. The real villain in this novel is the narrator, the despicable Al Manheim.

It’s easy to be fooled. Sammy isn’t a “nice person” and he clearly isn’t a “happy person.” He’s a wildly imbalanced person with a humongous ambition and not much else of note. He isn’t necessarily handsome or well-spoken. He isn’t an intellectual. He certainly doesn’t have any charm, or empathy for others. It’s easy to dislike him and it’s easy to watch him tread over other people on his way up and make the mistake of thinking he’s the bad guy.

But the question we must always ask ourselves in a tale of moral depravity is, “Where’s the hero, and what is he up to?” Who is keeping this guy in check? Who is going to stop him. In WMSR, the answer is “There isn’t one.” So the people who bear the responsibility for Sammy’s reign are all those who could be the hero and stop him, but don’t, or worse, those who claim to find him distasteful but end up worshipping him.

The best example of worshipping the supposed bad guy in the book is the way Al Manheim falls in love with Kit, a woman who admits to a one-time sexual relationship with Sammy Glick because of her burning curiosity to know what it’d be like to have all of his ambition and energy inside of her. She’s supposed to be the strong, principled and competent femme of the novel yet she couldn’t resist her own base sexual craving for a man she knew was no good. And rather than keep her at arm’s distance, Manheim becomes a soppy wet romantic for her. This is what you call “selling out.”

Sammy’s rise to the top in Hollywood despite having no talent, no money, no experience and no real value to anyone for anything is supposed to serve as a condemnation of the industry and maybe tangentially of the voluntary, for-profit capitalist economy itself. We’re supposed to read WMSR and look around us at all the entitled pricks like him who are our bosses, our owners or are actively in the process of clawing their way to such heights and smirk or despise them. “You’re just another Sammy Glick!” But why then do people secretly admire and envy them and their achievement-less achievement?

The answer is that the Al Manheim’s of the world have no self-esteem. They don’t love themselves enough to say “This is wrong!” on the many occasions they have to say such things. They don’t admire themselves enough to ignore the nuisance Sammy’s, to resist their endless persistence, to insist in return that they go ply their filth somewhere, anywhere but here. Instead, they open the city gates, invite them in and grab them a footstool so they can be comfortable as they bark out their orders. Then, like Al, they drink or smoke or ingest their minds into oblivion when the pressure of thinking about what they’ve done gets too great.

In other words, they’re weak.

Sometimes, they’re so weak, like Al Manheim, that they become accomplices to the madness. Like Nick Carraway, they’re happy to stand silently on the sidelines and observe and oogle as long as they can have the feeling that they’re in on the big adventure, as horrible as they think it may be.

And like Jay Gatsby, the Sammy Glick’s all have a pitiable background. They come from a world without love and so they can’t imagine a world with it. They’re not human, choosing, conscious entities. That experience of life was stripped from them at birth when they entered their perceived loveless world. All they can do is march to their idiot tune and destroy a bit of the world along the way to their doom.

Only they wouldn’t get very far, if it weren’t for the Al Manheims and the Nick Carraways.

The answer to the question What Makes Sammy Run? is less interesting than you hope. It’s so simple, it’s almost stupid– he has no love. It’s also somewhat pathetic because it can’t be helped. Sammy is damaged goods and no amount of therapy or intervention can get him back. The great irony of the novel, of any Sammy Glick, is that someone, somewhere served as the Great Enabler by bringing them into the world and nurturing them long enough to develop their skewed sense of possibility. From there, they’re working on auto-pilot.

A far more interesting question is What Makes Al Go Along With It?, especially when He Says He Hates Him.

Or, something I was thinking about last week, What Makes Davey Crawl? “Davey” is a small business owner, responsible for a few dozen people, who has managed to slowly run into the ground over a period of decades what could be a valuable little enterprise. There are the Sammy’s out there, deterministically trying to skitter to the top without adding anything of value, and then there are the Davey’s just trying to hold on and desperately, desperately disinterested in doing any better.

Why? Why is Davey happy without his ambition (is he happy?) when Sammy is miserable (to himself and others) with his? Sammy wants to wrap his whole mouth around the hose so there isn’t any for anyone else, but Davey just doesn’t want to turn it on all the way when there could be plenty more.

The answer is probably similarly simple, stupid and hopeless to fix. We may just have to suffer these Sammys, these Daveys and these Als as best we can.